News Recap | Written by CEP News | Jul 29 08 20:08 GMT | | |
(CEP News) - Economic news out of the U.S. Tuesday morning was mixed, with the Conference Board's consumer confidence index higher in July while the S&P Case-Shiller home price index continued to fall in May. Crude oil prices also continued to pull back to a two-month low. In Canada, average weekly earnings moved higher on both a monthly and annual basis in May. The U.S. Conference Board's consumer confidence index for July improved to 51.9 in Tuesday's report, above expectations for a slight decline to 50.1. Some economists were expecting such an improvement following the upward revisions in the Reuters/U of Michigan sentiment index last week, which bumped up to 61.2 from the preliminary 56.6 level. One-year inflation expectations fell back one-tenth of a percent to 7.6%, following two months at a record-high 7.7%. The previous month's headline reading of 50.4 was revised upwards to 51.0. One year ago, the index stood at 111.9. The expectations category improved to 43.0, up from 41.4 in June, but the present situation component fell one-tenth to 65.3. "Consumers' assessment of current conditions was little changed, suggesting there has been no significant improvement, nor significant deterioration, in business or labor market conditions," said Lynn Franco, director of the Conference Board's Consumer Research Center. Millan Mulraine, an economics strategist from TD Securities, wrote in a research note that "Despite the surprising rise in this indicator, consumer confidence in the U.S. remains at basement levels as consumers continue to contend with the headwinds coming from higher energy prices (despite recent declines), a deteriorating labour market and falling home prices." The S&P Case-Shiller U.S. home price index continued to deteriorate in May as the 20-city composite index posted a record annual decline of 15.8%. The Case-Shiller index has fallen every month since peaking in July 2006, but economists say the rate of decline may be slowing. The month-over-month decline in home prices was 0.86%, compared to the 1.28% loss in the previous month. The 20-city composite is now at a level of 168.54. "We can't be sure these data are reliable over such short runs but they do seem to suggest the rate of decline of existing home prices is slowing," said Ian Shepherdson, chief U.S. economist at HFE. He said a turnaround is unlikely either this year or the next, "but a slower rate of fall is welcome nonetheless." U.S. retail sales advanced 2.6% on a year-over-year basis in the week ending July 26, according to a weekly survey from the International Council of Shopping Centers (ICSC) and UBS Securities, while the Johnson Redbook retail survey recorded a 2.9% gain in the week. On a week-over-week basis, ICSC-UBS sales showed a 1.2% advance following a 0.2% advance in the previous week. "Overall demand improved nicely on a year-over-year basis as a result of improved consumer traffic at discounters, dollar, office supply and electronic stores," said Michael Niemira, chief economist at ICSC. Speaking at the Peter G. Peterson Institute for International Economics in Washington, D.C., Undersecretary for International Affairs David McCormick said there was little evidence that speculators were responsible for driving up the price of oil. The policy-maker added that the primary motivators of oil prices appeared to be tighter oil supplies, coupled with rising demand, and that there was little evidence that a weak U.S. dollar was having a significant upward impact. Oil prices continued their move lower on Tuesday, with Nymex crude oil falling below $121 at one point during the day to a two-month low. The decline was due in part to a stronger U.S. dollar and signs of softening demand. The Federal Reserve offered $75 billion from its Term Auction Facility (TAF) in a 28-day loan, which scored a stop-out rate of 2.35%. The Fed said 75 bidders offered a total of $90.555 billion in bids for the operation with a bid-to-cover ratio of 1.21. Average weekly wages continued to rise in Canada, with a 0.3% rise in May over the previous month, Statistics Canada reported. That represents a 3.1% gain on an annual basis to $791.48 per week, or $41,156.9 a year. StatsCan reported that consumer prices increased 2.2% in May on an annual basis. The Bank of Canada announced today the appointment of Mark E. Caplan as director of the Bank of Canada's Toronto office. The appointment will take effect in September. Caplan, a senior Canadian banker, will be responsible for building the Bank of Canada's relationship with the Toronto financial community. He will also be a member of the central bank's Monetary Policy Review and Financial System Review Committees. There were a number of releases overseas, including German CPI inflation data from the country's six largest states. The Federal Statistics Office (Destatis) reported that the national consumer price index (CPI) grew 3.3% year-over-year in July, up from the 3.2% increase expected but unchanged from the gain observed in June. On a monthly basis, July's inflation rate reached 0.6%, up from both the 0.5% gain expected and the 0.3% rise observed in the previous month. In EU harmonized terms, German inflation remained at 3.4%, in line with expectations. In monthly terms, Destatis announced that the HICP rose 0.6%, up from both the 0.5% increase and the 0.4% gain recorded in June. The Bank of England revised down its estimates on money supply growth and reported that M4 grew 1.8% month-over-month, down from the 2.0% growth rate initially reported, but up from the 0.4% growth rate observed in May. Year-over-year, the BOE announced that the M4 money supply grew at a rate of 11.4%, lower than the 11.5% rate previously estimated. According to the Confederation of British Industry's (CBI) industrial trades survey, the -36% balance between the percentage of respondents who reported lower sales in July and the percentage of respondents claiming a higher level of sales is the weakest recorded in the history of the study. Expectations had called for a much more balanced reading of -7%. By Stephen Huebl, shuebl@economicnews.ca , with contributions from Erik Kevin Franco, efranco@economicnews.ca , Todd Wailoo, twailoo@economicnews.ca , Patrick McGee, pmcgee@economicnews.ca and Geoff Matthews, gmatthews@economicnews.ca , edited by Cristina Markham, cmarkham@economicnews.ca CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News. A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer. |
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Wednesday, July 30, 2008
Tuesday's News Recap: U.S. Consumer Confidence Rises, Crude Oil Pulls Back
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